Articles Posted in bankruptcy court jurisdiction

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detroit photoWhen anyone – including a great city like Detroit – “successfully” emerges from bankruptcy, no one is usually happy how it turned out. This is clearly the case with the city of Detroit’s Chapter 9 municipal bankruptcy, following Judge Steven W. Rhodes’ approval of the reorganization plan on November 7, 2014.

When Detroit sought bankruptcy protection in July 2013, it was up to its eyeballs in debt and other unfunded financial obligations. The run-up to the Motor City’s bankruptcy unfolded over decades, but can be boiled down to this simple formula: not enough money coming in and too much money going out. At jeopardy, among other essential city services like, say, police and fire protection, were the pension plans of the municipality’s retired and current employees, as well as the fate of the significant art collection held by the Detroit Institute of Arts (the “DIA”), whose works could arguably be sold and the funds applied to the city’s debt obligations. Continue reading

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picasso woman-sitting-in-red-armchair-1939Now that I’ve got your attention … Back in the days when I spent a lot of time in bankruptcy court*, the most titillating cases – and there were very few – usually involved pop stars who’d made bad business deals and outspent their royalty income (like the band TLC). That was then, this is now. There’s a juicy case pending in the Central District of California involving Girls Gone Wild, the once-thriving, now-dying (at the hands of the bankruptcy trustee, according to bad boy founder of GGW, Joe Francis) raunchy entertainment brand that features topless drunken co-eds. Now Francis, who has been outspoken in his contempt for the court and the process, finds himself again in Bankruptcy Judge Sandra Klein’s sights.

Joe Francis has written the book on what not to do to stay in the court’s good graces. It culminated this past May when Francis flouted Judge Klein’s preliminary injunction that he not communicate with GGW employees and to stay at least 100 feet away from the company’s L.A. offices. According to documents filed in the case, he showed up May 9, with his girlfriend, at the GGW offices, shouting profanities and generally being mean. He showed up and did it again a week later. The bankruptcy trustee then filed a contempt motion against Francis, asserting the injunction violations, as well as issues of hindering removal of bankruptcy estate property and the failure to turn over to the trustee some pretty snazzy company cars that Francis says are irretrievably in Mexico. What’s a judge to do?

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